1Commercial Lease Agreement Discussion QuestionsNAMESchool of Business, Liberty University BUSI 561: Legal Issues in BusinessMia MacKeekinMarch 9, 2020
2Commercial Lease Agreement Discussion Questions:1. What is the distinction between a “commercial” and a “residential” lease? In a commercial lease agreement, should the law seek to protect the interests of the commercial tenant more than the interests of the commercial landlord? Why or why not?There are many distinctions between a commercial and residential lease. The most defining difference is that a commercial lease is between a lessor/landlord and a business tenant leasing property that is intended for business and generating profit, while a residential lease is between a lessor/landlord and an individual tenant leasing property as a residence. Within a residential lease the occupation of the property can vary from a set month structure (i.e. three-month, six-month, month-to month) to a term of years and rent is typically based upon a set amount per month. A commercial lease term is typically for a set number of years wherein at the end of the term the tenant can opt to renew another set term. In a commercial lease the law should seek to protect the interests of the tenant more than the interests of the commercial landlord. In the United Kingdom’s Landlord and Tenant (Covenants) Act of 1995, new leasing rules were prompted by concern that landlords were excessively protected while tenants were excessively prejudiced by being liable for the whole term (Moran, 2007). Commercial leases are created by the landlord party, and if no proper/efficient negotiations take place by the tenant before signing, the tenant is susceptible to aone-side benefiting lease. The law should seek to eliminate the power commercial landlords can hold (i.e. capping commercial lease security deposit amounts) and implement laws in place to protect the interests of the tenants. 2. Sections 5 and 6, respectively, impose on the commercial tenant the obligation of makingrepairs to the leased property, and of making alterations and improvements to the leased property. Should the lease impose these obligations on the tenant, or should such obligations be legally imposed on the commercial landlord? Explain your answer.Repairs should be imposed on the tenant. Prior to entering the lease, a tenant should have the premises surveyed, satisfying themselves of the present state and conditions of the premises. This should leave gaps of responsibility for which party is responsible for repairs. If the lessee signs off to the conditions of the premises the repairs required during their term fall under their responsibility whether they are preexisting or from the tenant’s occupation. According to Burke (2018), a common misconception is that if disrepair is present at the start of a lease the tenant isn’t held responsible, however, the tenant sometimes is required to repair or make do with despaired element.